October 29, 2012
One of Wall Street’s true all-stars, who correctly forecast the subprime mortgage debacle back in 2007-2008 is now forecasting sharply higher gold prices over the next two years.
Peter Schiff, head of Euro Pacific Capital, thinks that the combination of runaway government spending and loose monetary policies will cause the price of an ounce of gold to climb to $5,000 per ounce over the next two years.
Note that Schiff sees this eventuality regardless of who wins the presidential election next week…
Here is a video of Schiff’s statement on CNBC–TV last week:
October 1, 2012
The bulls once again ruled the gold market on the first day of the 4th quarter of 2012. This positive 4th quarter trading day comes on the heels of an excellent 3rd quarter for the yellow metal. The price of gold increased by 10.6% during the 3rd quarter, its strongest quarterly showing since the 2nd quarter of 2010.
The spot price of gold rallied $8.70 per ounce to finish above $1,780 per ounce.
Gold was buoyed by a positive manufacturing report, continuing weakness in the US dollar, thanks to the Fed’s QE3 monetary policy, and by the fact that Fed Chairman Ben Bernanke gave a speech in Indiana at mid-day. Though the speech contained nothing surprising for gold investors, as often happens in Bernanke’s case, the Fed chairman managed to spook the financial markets, derailing what was a much stronger rally on Wall Street.
Meanwhile, Barclay’s bank, one of the United Kingdom’s biggest banks, turned bullish on gold with the following market comment:
“With the dollar weakening and debates over inflation and fiat currency debasement now likely to move back to center stage, QE3 is likely to support the recent pickup in physical and futures market buying, which should help to bring to an end gold’s position as one of the weakest commodity markets in 2012.”
September 28, 2012
The chickens may already be coming home to roost in Europe.
For some time Europe has had a very loose, inflationary monetary policy, so it should come as no surprise perhaps that inflation rates are already higher than expected.
Europe may very well be the “canary in the mineshaft.” Other regions of the world, including the USA, have adopted very similar monetary policies. Investors should take notice and invest in assets that not only protect them from high inflation, but actually benefit from high inflation.
Gold investments, rare gold coins in particular, are ideally suited for just such a purpose. They have historically outperformed paper investments during periods of high inflation. But the time to buy is now–before inflation shows up in earnest in US inflation gauges.
Note that in the article linked below, several of the European Union nations are in recession at the same time that these inflation numbers have surfaced. The combination of inflation with recession is known as stagflation, an economic affliction that is particularly damaging to paper assets and positive for gold investments.
Inflation in the 17 countries that use the euro rose unexpectedly to a six-month high in September…
No reasons for the increase were provided by Eurostat, as the figure was only a preliminary estimate, though higher energy costs are likely to blame.
September 27, 2012
The price of gold surged higher by over $25 per ounce to just under $1,780 on a double dose of news that the market regarded as bullish.
First came the news that China was further embarking on a monetary stimulus plan of its own to try to jump-start its slowing economy. With Europe, the US, China and Japan all printing money at the same time, traders are very bullish on the outlook for gold.
At the same time, Spain announced that it would meet budget deficit targets, an indication that perhaps the worst is over for the Spanish depression.
September 17, 2012
QE3 is having its predictable impact on the US dollar. The dollar is now down around a 7-month low. The polar opposite to the US dollar is gold, so investors should be accumulating gold investments in response to this latest slump in the US dollar…
- The dollar hovered near a seven-month low against major currencies on Monday after the Federal Reserve’s announcement of aggressive monetary easing last week dampened the outlook for the U.S. currency.Some near-term recovery could be likely, however, given the dollar’s 3 percent drop so far this month, which may have been too far, too fast. The move pushed the euro to a four-month high against the dollar and the yen to a seven-month high.
The Fed pledged last week to continue buying mortgage bonds until unemployment falls significantly. The aggressive move came a week after the European Central Bank unveiled a new bond-buying program to address the region’s debt crisis.
“The outlook for the dollar has definitely been damaged by the policy actions by both central banks — the Fed and the ECB,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
The dollar index, which measures the U.S. unit’s value against a basket of currencies, stood at 78.789 .DXY, not far from the 78.601 set on Friday, a level last seen in late February.